Energy investing is an industry that has been opaque and slow moving as any. But now EnergyFunders is coming in with a tech based approach mirroring that of equity crowdfunding.

Investing in EnergyFunders is a bit of a meta investment in that you are investing in another platform that is going to provide investment opportunities in oil and gas projects as well as equity crowdfunding in alternative energy tech startups.

Investing in EnergyFunders is investing in the future of equity crowdfunding. Its investing in the future of energy. Overall, its an immensely exciting company. Learn more about this opportunity in our discussion with Casey below and with time running out be sure to invest via SeedInvest.

Funding Round Details

EnergyFunders logo
Company: EnergyFunders
Security Type: Debt
Valuation: $0
Min Investment: $1,000
Platform: SeedInvest
Deadline: Aug 17, 2018
View Deal

Casey, you’ve spent many years both in the mortgage business and in the structuring of debt and equity deals for commercial real estate and oil and gas companies. How has this helped you to shape your vision for EnergyFunders?

I am 4th generation Oil and gas, even though I avoided the industry for many years, I was drawn back in as I saw the inefficiencies and lack of transparency that has dominated the space. Having made a living as a middleman, I realized that technology is eventually going to disintermediate every space.

In 2013, real estate, debt and start up investing platforms started carving out the industry. In 2014, I was introduced to EnergyFunders and I knew being first in an emerging platform industry and the leader is critical.

For those that don’t know how do you define EnergyFunders as a business?

Not only are we democratizing Energy investments (primarily oil and gas sector) we are also disintermediating an industry that uses very old ways. Traditionally Brokers/Promoters call investors and tell them about a great deal, those investors sign paper, send in a check, the promoter puts money in their pocket and the investor typically receives very little communication and marginal returns.   

This process is dated and we are changing that. As a financial technology firm, we provide investors access into projects which we run through a series of due diligence. Investors can make smaller investments into more projects. This is the diversification strategy used in early stage investing.

Unlike other equity crowdfunding platforms, you have taken the approach of focusing in on one specific vertical. Why do you think this is the right approach?

Oil and gas is a very complex product. Most people feel like they need a degree in petroleum engineering just to invest. That is not the case and we are working to simplify how to invest. Oil and gas investments offer great tax incentives, potential high rate of returns and long term cash flow if the project is successful. There is a level of expertise when evaluating the product, however we do this in-house and work with quality operators with solid track records.

Can you break down what the O&G exploration and well projects look like?

Here is a link to view our recent video, it gives you a viewpoint of  what people are investing in. Click Here

Today we focus in the Texas Gulf Coast and southern Louisiana area which is well-known and there is a lot of knowledge from our team. The wells are conventional, which means they are vertical wells, typically 5,000’ to 13,000’ and the costs are much more manageable. We work with the operators to buy into ⅛ of ¼ of the Lease and we are responsible for those costs.

The first well is exploration, has seismic and producing wells in the area. If the first well is successful, there will be more wells drilled, which is where you see the bigger returns. There is usually 6 to 8 months before investors receive their first payment and the wells can payout in excess of 10 years.  Today there is no liquidity, but with advances in Blockchain, we believe this will change.

Who is the typical O&G exploration project approaching you to receive investment? Are you solving a need for the market or just providing an additional source of funding?

Most people don’t realize, but O&G projects under $10 million don’t have banks or lenders to work with. 100% is equity, that is why the tax benefits are lucrative, as we want the US to be energy independent. So the 9,000 operators/exploration teams in the country raise money from broker dealers, wealthy individuals, phone rooms etc.

The cost of capital is expensive. As we centralize and build out the platform, investors will have a way to track investments and operator’s history and  be able to negotiate better terms as we remove the middlemen. Operators and exploration teams can have more efficiency around communication, payouts and receiving investment.

How are investment opportunities won in the O&G exploration space and what does your diligence process look like?

Diligence is critical and knowing who we are working with is also critical. We all know that there is oil in Texas and surrounding areas, however, finding the right teams that have done it before in the same area(ex. they use seismic, wells that produce in and around the area) is critical.  Another big item for us is we require that at least 10% of cash is invested by the Operators/Exploration teams. Additionally, we have two reservoir engineers and a land man on staff who review the economics, reservoir potential and other factors that play a role in these wells having a better chance to succeed.

On the tech and alternative energy side what types of businesses will you be focused on and how will you create a pipeline of opportunities for investors?  

Right now we are focused 100% in Oil and gas. This will change over the years, however, right now we have a product that can make investors money.  Other energy types are less proven and don’t have the best track record on paying investors back.

How do you plan to monetize the platform?

Assuming you can get two sides of the market working, there are a lot of ways to monetize.  The key focus for us is to grab market share, and remove as much friction from the investment process for investors. If we provide the best product on the street, the money will follow.

Scaling a business like this I would imagine is hard as a lot of the winning deals and vetting companies is very manual. Are you implementing any technologies to help you scale the business?

Technology is a critical role in what we do. While we are building out tools for the investors on the backend we are creating processes from the administration side to automate payments in and out as well as algorithms to help score the value of projects. We have even deployed Blockchain to record transactions and eventually play a role in the secondary market.  That is the FinTech side of the business. All that is great, but you have to bring investors good products or you will never have the transaction volumes needed.

What challenges do you face in hosting RegCF offerings and what do you think can be improved about RegCF?

We are the #37 registered funding portal in America.  We invested a lot in being able to provide this type of funding. We also decided to raise money using Reg CF for EnergyFunders to learn from one of the best platforms. Click here to learn more What we learned is you need a lot of support from the community.  We are in Houston and there is a small ecosystem growing for technology advancements around oil and gas.  We are working to gain support and trust from the community, letting them learn about CF and the power it brings. Now that we did it and had success, I know we can show other great companies how to take advantage of this amazing tool.

How do you plan to allocate the capital you are raising to build the business?

We have hired in a lot of the technical expertise, from Land and Engineering, to legal and technology. This is where a good portion of our capital is going: To continue building a world-class team. We are also spending on technology development. Once our Crowdnote is complete, we will have enough runway to get to the Series A we have been working toward all these years. We have a lot of community support.

Well done Casey and team on a terrific raise and on building the future of energy investing. Be sure to invest HERE.